Amid Narrowed Q4 Loss, Sears Holdings Plans to Sell Off Stores

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searsHoffman Estates, IL—Despite a smaller fourth quarter loss than last year, Sears Holdings plans to continue on Chairman Edward Lampert plans to dismantle the company as it posts its fourth straight year of drastic losses.

In a letter accompany today’s earnings report, Lampert said that the company plans to sell off 200 to 300 stores in a real estate investment trust (REIT), continuing to run the stores—or rent them to new tenants.

Lampert is extending his hedge fund’s $200 million loan to Sears Holding until June. His fund and others loaned Sears $400 million during a cash pinch last fall. The loan came due in December, but Lampert agreed to let Sears use half the money until June 1 or until the proceeds from the REIT are in.

Sears Holdings, which runs Kmart and Sears, has been closing stores, selling assets and slashing inventory as it continues with efforts to turn around its business.

Lampert said in the letter to shareholders, employees and members that without the aggressive steps the company has taken, “we would be stuck on the same path that has claimed retailers like Circuit City, Borders, Radio Shack and others. Our only option is to become better equipped to support, anticipate and exceed our members’ needs.”

For the quarter ended Jan. 31, Sears Holdings lost $159 million, or $1.50 a share, compared to a loss of $358 million, or $3.37 a share, a year ago.

‘We Can Improve Results’

Net revenue declined to$8.1 billion from $10.59 billion after the sale of most of stake in its Canadian unit, the spinoff of Lands’ End, and the closure of more Kmart and Sears stores. That helped to trim costs and expenses to $8.23 billion, from $10.73 billion last year.

Comparable store sales were down 7% at Sears, while Kmart was down 2%.

The company’s 2014 revenue hit $31.2 billion, down from $49.1 billion in 2005, when Sears and Kmart were merged.

“While we clearly believe that we can improve upon these results, we are pleased with the positive trend that started in the third quarter, and we currently expect this level of improvement to carry forward into our full year 2015 results,” Lampert said in a statement. “We believe that the changes we are making to focus on our best stores, reward our best members and pursue our best categories will help us continue to transform Sears Holdings into a leading integrated membership-focused company.”

For the year, Kmart had positive performance in several categories, most notably apparel and jewelry, partially offset by declines in the consumer electronics and grocery and household categories. Excluding the impact of the consumer electronics and grocery & household goods businesses, comparable store sales would have increased 0.8% for the year. For the year, excluding the impact of consumer electronics, Sears Domestic comparable store sales would have decreased 0.5%, reflecting improved performance in the home appliance and mattress categories offset by declines in Sears Auto Centers, apparel and lawn & garden.

The company’s cash on hand shrank by more than half to $250 million. Chief Financial Officer Rob Schreisheim said in a statement that the actions the company took last year—such as store closures and inventory reduction—generated $2.3 billion in liquidity.